How We Bought a $47,000 House and Sold for $85,000

Before moving to Atlanta, James and I lived in the Tampa Bay area for five years. Between 2008 and 2009, we were renting a condo, but decided to look for a cheap property to fix up. Mind you, this was in early 2009 during the housing crisis. Florida real estate was at bargain prices, you just had to know what you were getting into. The foreclosures were difficult to get a shot at, because investors were snapping most of those properties up with cash offers.

We looked at countless short sales, and recall viewing houses in some pretty awful neighborhoods – including one with a hair weave on the front steps and drug paraphernalia inside, and another one where we discovered a homeless person in the backyard snoring. One time we were looking at a $34,000 house, and the cops showed up looking for someone. (Probably a sign you shouldn’t buy it)

Our goal was to find the cheapest property we could in a relatively safe neighborhood. This turned out to be a 2 bedroom, 1 bathroom short sale in St. Petersburg for $47,900. The 794 square foot bungalow-style house was built in the 1950s and was only one block away from Tampa Bay. It was technically on an island, but I use that term rather liberally. There were more expensive waterfront homes in the neighborhood, but as you drove further into the center of the island – things got sketchier.

James is an impeccable judge of inspecting properties. Just with a quick glance at a house, he can tick off what’s wrong with it – and is always right. He is fantastic with picking out diamonds in the rough: structurally sound homes in need of cosmetic changes.

The move-in condition of the house was definitely less than ideal. It required a deep cleaning, had drywood termites (we had the house tented prior to moving in), had outdated and improperly installed electrical wiring that needed to be revamped, and a number of other issues that we addressed. James did about 95 percent of the work himself. I helped with cleaning, choosing items for the house, and painting.

In the kitchen, James upgraded the cabinets to dark chocolate real hardwood cabinets from Cabinets To Go. The ogee edge marble laminate countertop was purchased from Lowe’s. A glass tile backsplash was put in, and we switched to Frigidaire stainless steel appliances. There used to be old double ceiling fans in the kitchen (and a crib???), but they were replaced with flush mount ceiling lights, installed a granite composite sink, a Delta faucet, and James recessed the refrigerator into the wall which maximized floor space in the house – improving overall flow and counter space. Custom trim and woodwork was also installed throughout the house and an example can be seen above.

The previous occupants had the entire house crammed with furniture and baby items. It made the house feel tiny and there was not any natural light being let in.

We replaced all of the antiquated jalousie windows to vinyl and installed custom window casings to accent the new modern look. The majority of the flooring stayed, but I spent a LOT of time on my hands and knees cleaning grout with Zep Grout Cleaner. (If you have grout – get this product! It works miracles!) The rest of the flooring was then ripped out and reinstalled by James.

The bathroom had been remodeled roughly a decade earlier with bland tile and a pedestal sink… But none of the fixtures were worth keeping, so they were all taken out – except for the tub, which was original to the house. James installed a sleek black granite floor, modern slim profile toilet, new floating vanity, crushed marble sink, mirror, waterfall faucet, track lighting, and painted three out of the four walls gray. He also added a gray and white crushed marble shower and tub surround and finished it off with fluted trim and rosettes. Initially, all of the interior walls were textured. It didn’t look at all professional, so James skim coated all the walls and sanded them flat. We removed yet another dated, non-working ceiling fan in the bedroom, and painted the closet doors a bright white.

The four large picture windows in the front room were all replaced, which really changed the look of not only this room – but the exterior of the house. We staged this area as a small dining room.

While we were getting ready to put the house on the market, my parents came up a few days to help us paint. They also brought over a power washer and cleaned the porch, front walk, and driveway. The exterior paint we used is a Glidden shade called Peach Crayon. James added a few flowers, and fixed the sprinkler system.

This back room is on the records as the second bedroom, but it’s small and has sliding doors in it which lead to a screened in porch. We didn’t have to do much in this room except paint, a new wall sconce ($15 from Joss & Main), and vertical blinds. Most of the rooms were painted in Behr’s Chocolate Froth 720C-2, which we really liked. It’s a great neutral!

Now, I want to point out that this was not a fast process. It took us a few months to get the house to a condition where we were able to move in mid-November 2009. When I accepted a new job in November 2012, James stayed behind for nearly a year to continue working and finish the renovations. We had only done most of the kitchen and part of the bathroom. There were lots of unfinished projects to get done.

For much of the time we lived in the house, it was a construction zone. We didn’t have kitchen countertops for months, and stored all of our stuff in the back bedroom. I drove back and forth to help out every chance I got. James pretty much lived at the Home Depot and knew every aisle and item that was sold there. We didn’t have to spend any time researching what we needed as it was available five minutes from home.

Once we were almost at the finish line, we contacted the same realtor we worked with to buy the property – Melanie Atkinson with The Wood Team. She is absolutely incredible – very aggressive for her clients and no-nonsense. We owe her a GREAT deal of the credit with selling the house at a price we were more than satisfied with. Melanie offered extremely helpful feedback: she was the one who recommended we paint with a shade like Chocolate Froth, add a dining area, build an enclosure for the washer/dryer located in the carport and that we use smaller-scale furniture.

James followed all of Melanie’s instructions as we wanted to put our best foot forward when showing the house. We rented a storage unit to de-clutter, and polished the house off so that nothing would need to be done for another decade.

As an added benefit to the buyer, we included an 8-camera home surveillance system, and a home security system. The A/C condenser was missing when we bought the house, so we had it replaced with a 13 seer 1 1/2 ton condenser.

The house was on the market for only a month, and we had a contract for $85,000. Our closing in September 2013 netted us over $35,000. We increased our home’s market price by 78 percent in four years. I do want to add that houses in our neighborhood were having a tough time selling. Quite a few were just sitting around in the $40,000 – $50,000 range. So this still was not a hot real estate climate by any definition.

All in – we estimate spending around $18,000 total for everything done to the property. Everything was paid for in cash, and we did projects as we could afford them.

Our mortgage was very reasonable: $522 per month. That includes PMI, homeowner’s and flood insurance, plus property taxes. It seemed like every year our assessment dropped for property taxes – they were only $350 for 2013.

While many of our peers are buying more expensive homes, we have found it works best for us to only buy as much home as we could easily afford on one salary. That way we are not biting off more than we can chew, and could survive a job loss without losing the house. It also allows us to have more disposable income we can use for improvements.

I consider myself extremely lucky to have a husband with so many talents, so we are able to tackle home renovations without hiring outside help most of the time. This saves a great deal of money. If you are not skilled in this area, buying fixer-uppers may not be for you. You’re not likely to recoup your investment on a project once you pay for the materials and labor – which is the most expensive cost of renovations.

Homeownership has many costs, and is actually more expensive than renting when you factor in maintenance. James takes care of this himself, so we do not have to pay someone to mow the lawn, install fixtures, clean gutters, fix things, etc.

We were very careful not to over-improve the house based on the surrounding comps. It didn’t make sense to spend more on solid surface countertops, because none of the similar homes in the same price range featured them. Our staging photos were far beyond any of the others we saw in the neighborhood – even surpassing many $300,000+ homes. Hardly any were turn-key, and it was rare to see another remodeled property. Most looked untouched since they were built.

So that’s the story of our last house – hope you enjoyed reading about it and keep with us as this “new” house will be following suit in the near future. Feel free to share your thoughts with us in the comments.